Taking advantage of JAL’s financial woes and a continuing growth in the China market, All Nippon Airways announced plans to launch a low-cost carrier by the second half of next year.
What’s driving this demand for more low-cost travel? Chinese tourists.
The impending wave of Chinese tourists and business travelers flowing into Japan was a big catalyst in launching the Japanese low-cost carrier: The Japan Tourism Agency aims to more than triple the number of Chinese tourists from one million last year to 3.9 million in 2013, when they will become the single-biggest nationality of tourists in Japan.
Japan’s loosening of visa regulations for Chinese citizens has helped to fuel this demand.
The new airline will be hubbed at Kansai International Airport in Osaka (western Japan) and will offer both domestic and international short-haul service. The airline’s goal is to undercut rivals prices by 50%. I smell a fare war.
Some analysts question whether the new airline will takeoff. Landing fees in Japan are the most expensive in the world (almost US$10,000 to land a 747 at NRT) but the new airline intends to compensate for the higher fees by a-la-carte pricing. Jetstar here we come…
ANA will hold a 39% stake in the new airline. No word yet on whether the subsidiary will be included in Star Alliance, but I suspect that like Singapore’s Silk Air subsidiary, the answer will be no.